Former Carlton hotel sells for $6.8 million as development play

Interests associated with burgeoning builder Ausgroup Property and Development have paid $6.8 million for a corner hotel turned mixed use investment in Melbourne’s inner north Carlton.

The deal is the first and only one struck along the suburb’s Lygon Street retail strip last year.

Colliers International’s Daniel Wolman, Oliver Hay and Dave Walker, with MMJ Real Estate’s Joel Wald sealed it, two weeks before Christmas.

Throughout the public marketing campaign, 186-190 Lygon Street carried a price guide of about $6 million.

The site (marked) relative to University of Melbourne and the Melbourne CBD.

The actual result values the land at over $16,000 per square metre, which Mr Wolman said “is exceptionally strong for this precinct and a record if you consider the undevelopable rear laneway which is on title”.

“This property presented a rare opportunity to secure a substantial corner freehold with enormous scope for re positioning,” the broker added.

“With high exposure to Lygon street, Pelham Street and a rear laneway, it’s no surprise we received interest from hospitality operators, office developers and occupiers”.

The agents wouldn’t confirm the purchaser, when contacted, but said “the new owner has opportunities for lease-renewal, refurbishment of the existing building, construction of additional levels, rooftop activation and a diversification towards food and beverage, retail or however else they see fit.”

The 659 sqm double storey building occupies a 416 sqm parcel about a kilometre from the city.

Mr Wald said the result “further confirmed continuing interest in well-located properties primed for re positioning within retail strips”.

Mr Walker added that the property’s prime location, opposite Argyle Square, walking distance to University of Melbourne and the Royal Melbourne Institute of Technology, was a major selling point.

“The extension of the CBD into the north has transformed historic precincts like Lygon Street, bringing a new wave of investment and occupation, particularly an increased demand from office developers, office tenants and hospitality providers,” the agent said.

The site is near the Parkville train station, under construction as part of the $11 billion Metro Tunnel project, and which will connect the area to South Yarra, via the city, and North Melbourne.

Mr Walker said the proposed train station will revolutionise the precinct’s status as a commercial and hospitality destination, as well as deliver “a new depth of 24-hour activation”.

Princes Park and Carlton Gardens are also in the vicinity, the marketing agents added.

The former hotel is now configured with retail and office space.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco